B. Krishnakumar

What is the outlook for Divi's Lab bought at Rs 1,360? Is it advisable to buy Aztec Software at present levels? — Vallikasi & Amarnath A. Reddy.

Divi's Labs (Rs 1,113.4): After moving past the Rs 2,000-mark in March, the share price has been on a downtrend. There is no evidence of the completion of this downtrend. The stock however appears to enjoy support at around the Rs 1,030-level. Hold with a stop loss at Rs 1,030 and use rally to either tighten stop loss or reduce exposures.

Only a move above Rs 1,200 would impart bullish momentum. Till such time, the trend would be either bearish or the stock could move in a sideways pattern.

Aztec Software (Rs 66.5): The stock appears to be in the midst of a downtrend. The long-term uptrend would resume only when the present bearish trend is complete. Those who have entered at lower levels may take partial profits or have a stop loss at Rs 55 for the balance. Fresh buying may be avoided for the moment. Only a close above Rs 75 would impart strength. Fresh funds may be committed in the stock when the stock closes above Rs 75, with a suitable stop loss in place.

I hold shares of Federal Bank at an average price of Rs 100 and CESC at Rs 100. Please advise if I should hold or sell these stocks. — Meenakshi Vashisth

Federal Bank (Rs 346.9): Taking into account your entry price and the positive long-term trend, there is no reason to sell the stock at prevailing rates. The share price could move to Rs 390-Rs 400 range. Though this target is not likely to be achieved in a jiffy, a steady progress towards this range appears likely. Hold with a stop loss at Rs 305. Those with a higher risk appetite may consider long positions on a move above Rs 354, with a stop-loss at Rs 335.

CESC (Rs 140.8): The price movement has turned volatile in the past few weeks. Though the long-term trend is bullish, there are no signs of the onset of a short-term upward trend.

A strong upward move would emerge when the short-term cycle turns positive and the long-term cycle is also bullish. The positive outlook would be in force as long as the stock rules above the stop loss level of Rs 128. Hold with a stop loss at Rs 128. Fresh long positions may be considered on a move past Rs 150, with a stop loss at Rs 140.

What are the prospects of SAIL bought at Rs 49? — M.C. Pradhan

SAIL (Rs 50.1): There is a strong overhead resistance at Rs 52. A move above this level would impart positive momentum. While fresh buying may be deferred, existing holders may have a stop loss at Rs 44. Those willing to take fresh exposures may do so once the stock closes above Rs 52. Stop loss for fresh buying may be placed at Rs 47.

I bought Reliance Energy at Rs 620 and Tata Power at Rs 315. Kindly advise whether to hold or sell. — R. Ramasubrahmanian

Reliance Energy (Rs 634.7): The near-term trend does not appear positive. Hold with a stop loss at Rs 601. The stock faces resistance at Rs 690-Rs 700. Fresh buying may be avoided. A drop below Rs 601 would warrant dilution of holdings.

Tata Power (Rs 318.9): The stock appears to be headed towards Rs 335-Rs 340 range. There is no reason to sell the stock now. Hold with a stop loss at Rs 305. Fresh buying may also be considered with a stop loss at Rs 309.

I have a substantial holding of GIC housing finance bought at Rs 28.4. Should I hold or exit and what is the outlook for Neyveli Lignite? — Vijay & Jasbir Singh Sodhi

GIC Housing (Rs 26.2): The stock could move towards the Rs 40-mark. A steady move towards this target zone appears likely. A drop below Rs 22 would however negate the positive outlook for the stock. Hold with a stop loss at Rs 22 for a portion of the holding and at Rs 19 for the balance.

Neyveli Lignite (Rs 60.5): The short-term outlook for the stock is weak. A drop to Rs 57-Rs 58 range appears likely. The share price is however likely to resume the upward move after the completion of the expected drop. Hold with a stop loss at Rs 56. Those wanting to take fresh exposures may wait for the stock to move past Rs 64. Stop loss for fresh buying may be placed at Rs 58.

What is the outlook for IndusInd Bank bought at Rs 48? — K.S. Venugopalan

IndusInd Bank (Rs 40.9): The stock appears to have completed the downward move at recent low of Rs 36. If this view is valid, the stock could move towards the recent high of Rs 60-Rs 62 range. Hold with a stop loss at Rs 35.5. A drop below this range could pave way for a drop to Rs 32-Rs 33 range. Even if the stock drops to Rs 32-Rs 33 range, it would not negate the positive outlook. It would only delay the process of the move to Rs 60-Rs 62 range.

Please indicate the prospects of Mercator Lines bought at Rs 400. — Sree Harsha

Mercator Lines (Rs 666): The stock is likely to seek higher levels of Rs 715-Rs 725 range. Hold with a stop loss at Rs 610. Taking into account your entry price and positive outlook there is no reason to sell the stock now. Fresh buying may also be considered by those willing to take risk. The stop loss for fresh buying may be placed at Rs 610.

What are the prospects for Gujarat NRE Coke bought at Rs 114.5? — Anoop T.H

Gujarat NRE (Rs 113.4): A drop below Rs 103 would impart weakness. The stock appears to have the potential to move to Rs 140-Rs 145 range. Hold with a stop loss at Rs 103 and use price move past Rs 125 to take fresh exposures. A drop below Rs 103 would warrant dilution of holding.

I have shares of Glenmark Pharma purchased at Rs 364 and Saw Pipes at Rs 199. Should I hold or sell? — M.N. Krishna Murthy

Glenmark Pharma (Rs 329): There is no reason to sell the stock now as the share price could move towards the Rs 390-Rs 400 mark. Hold with a stop loss at Rs 300. Fresh upward moves may be considered on a move past Rs 352, with a stop loss at Rs 325.

Saw Pipes (Rs 186.3): There appears to be little downside risk from present levels. Though there are no signs of the onset of a bullish trend, a move to Rs 208-Rs 210 range appears likely. Hold with a stop loss at Rs 180 and use a move past Rs 193 to move take fresh exposures. Stop loss for fresh exposures may be placed at Rs 180.

Should I hold or sell Berger Paints bought at Rs 41? — Jasbir Singh Sodhi

Berger Paints (Rs 33): The near-term outlook appears positive. A move towards Rs 42-Rs 45 range appears likely. Hold with a stop loss at Rs 29. Fresh buying may also be considered on a move past Rs 34, with a stop loss at Rs 29.

I purchased Jain Irrigation at Rs 92 and SKF India at Rs 118. Kindly advise whether to hold or sell. — Arul

Jain Irrigation (Rs 96.4): The recent rally from the low of Rs 48 does not appear too convincing. Though a series of higher highs and higher lows pattern is visible, the price swings have tended to overlap with earlier swings. This overlapping structure is not a positive sign. Hold with a stop loss at Rs 87 and employ a trailing stop loss in the event of a sustained upward move.

SKF India (Rs 134.4): The share price could drop to Rs 125-Rs 126 range in the near-term. The share price could resume its uptrend after completing the expected downward move. Hold with a stop loss at Rs 120. A move past Rs 141 may be used to take fresh exposures with a stop loss at Rs 130.

I purchased Andhra Sugar at Rs 106 and Aurobindo Pharma at Rs 340. What should be my strategy; should I or sell? — Debjyoti Majumdar & A.R.Suresh

Andhra Sugar (Rs 107.9): The stock moved to the target zone of Rs 115-Rs 120 mentioned earlier (edition dated October 24). It has subsequently dropped below the stop-loss level of Rs 102 mentioned in the edition dated October 31.

The stock has however managed to hold above the first stop loss level of Rs 90. After an intra-day breach of the stop loss level of Rs 102, the stock managed to recover ground in the past few days. The view of a rally to Rs 128-Rs 130 range is still valid. Hold with a stop loss at Rs 96 for a portion of the holding and at Rs 87 for the balance. Investors willing to take risk, especially the ones who have entered at lower levels may have the stop loss at Rs 96 for the entire lot.

Aurobindo Pharma (Rs 332.8): Hold on to the exposures as the long-term trend is bullish. The stock is in a consolidation phase. A huge "contracting triangle" pattern is taking shape in the daily charts. This could turn out to be Wave 4 in Elliott Wave parlance. If this view is valid, there would be room for at least one leg of upside movement. Hold with a stop loss at Rs 283. Though the stop loss is quite wide, it would worth the risk as the stock appears to have significant upside potential on the completion of the present sideways move. Those who are uncomfortable with the stop loss level may sell at prevailing levels and consider re-entry on the evidence of support at about Rs 285-Rs 295 range.

(Note: The analysis and opinion expressed in these columns are based on the technical analysis of the past price behaviour. Opinion and price targets are based on the Elliott Wave Analysis. The stop-loss level provided with the recommendation is important. The original view would stand negated if the stop loss level is breached. There is a risk of loss in trading)

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